Glaxo may face bill for £1 billion

PUBLISHED: 10:00 09 November 2006 | UPDATED: 11:11 06 May 2010

BRITAIN S largest drugs company is facing a bitter pill in the form of a bill from Whitehall that could be for over £1 billion. An independent report on behalf of the Department of Health has revealed that GalxoSmithKline, which has a research headquarter

BRITAIN'S largest drugs company is facing a bitter pill in the form of a bill from Whitehall that could be for over £1 billion.

An independent report on behalf of the Department of Health has revealed that GalxoSmithKline, which has a research headquarters in Stevenage, may have over-charged the NHS by a staggering £280 million a year for at least five years.

GlaxoSmithKline, which sells over £1.3 billion worth of life-saving drugs to the NHS every year, agreed to price cuts in 1999 after talks with the Government.

But the Pharmaceutical Price Regulation Scheme (PPRS) independent arbitration panel, set up by the Department of Health and chaired by Lord Preston of Mile End, allegedly found the company had continued to bill the NHS the full price for another five years after agreeing the price savings.

Fearing the big bill, GlaxoSmithKline has even warned shareholders it may be financially liable for the error if they have to pay back the over-charging.

The company has also gathered a legal team to fight the claim in the high court.

A spokesman for GlaxoSmithKline said: "We believe we have delivered in excess of the savings required by the NHS under the 1999 scheme, and have asked to appeal the decision of the arbitration panel.

"In the meantime, we are continuing to work with the Department of Health to resolve the matter.

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